Tamil Nadu Interim Budget: 16th Finance Commission report a disappointment, says Thangam Thennarasu

Finance Minister Thangam Thennarasu on Tuesday (February 17, 2026) reiterated that the 16^th Finance Commission’s report has been a great disappointment to the State of Tamil Nadu.

Presenting the Interim Budget for 2026-27 in the Legislative Assembly, Mr. Thennarasu said even when all States had unequivocally sought a higher share in the divisible pool of Central taxes, the 16^th Finance Commission had recommended to retain the share at 41%. “It is disappointing to see that our serious concern toward the increasing levy of cesses and surcharges has not found place in the Commission’s recommendations,” he said.

Read the full Budget speech here.

Among States, yet again, Tamil Nadu has been “unfairly treated” by the Commission by not giving our “due and legitimate share,” he said. Since the 9^th Finance Commission, when our share was 7.9%, successive finance commissions had reduced it to 4.079 %, leading to a loss of ₹3.17 lakh crore, which is equivalent to approximately 33% of our outstanding debt, the Minister pointed out.

“In the 16^th Finance Commission, while our neighbouring States of Kerala and Karnataka have been given a growth of 23.74% and 13.27% respectively, Tamil Nadu has been given a marginal increase of 0.44%, which is the lowest among comparable States. It is yet again emphasised that we were not seeking generosity but justice to ensure equality, and this Commission has failed in this regard,” he said.

To drive home the State’s postion, Mr. Thennarasu quoted former Chief Minister M. Karunanidhi’s Budget speech in 1971-72: “The power to levy taxes is concentrated with the Union government. However, the major responsibility of expenditure for safeguarding and promoting public welfare rests with the State governments. This peculiar situation — where authority lies on one side and responsibility on the other — is the fundamental cause of many of our problems. Therefore, we believe that the present system of revenue sharing must be restructured. If necessary, the Constitution itself should be amended for this purpose.”

Mr. Thennarsu summed it up thus: “It is indeed regrettable that the situation stated with concern by Muthamizh Arignar Kalaignar [M.Karunanidhi] half a century ago remains unchanged even today.”